An unpopular government is running out of steam. Everyone knows the prime minister will be gone within months. A young and charismatic opposition leader is making hay over public service failings. Desperate to recapture the agenda, ministers have announced an initiative based on the latest IT.

Yes, it's 1996. Ten years ago next week , John Major's Conservative administration unveiled Britain's first national e-government programme. A green paper called Government Direct ("e" was not yet a business buzzword) set out a vision of citizens paying their taxes, receiving benefits and taking part in the democratic process via new electronic channels.

Government Direct was the first green paper to appear as a CD-Rom; if you were lucky enough to have an internet connection, you could download it in Word 6. As a media event, it had to compete with the release of the Spice Girls' first album and Bill Clinton winning a second term in office. Within months, its brand name was airbrushed from the history of government reform.

However Government Direct's ambition - to create public services centred on the person who needs them rather than the bureaucracies that supply them - survives. A decade on, after spending several billion pounds building websites, the government is only now getting to grips with many of the challenges the green paper set.

Government Direct was the work of five adventurous minds in the Cabinet Office. Colin Muid, one of the authors, has fond memories of the programme. He was lured from running IT systems at the Home Office to join a government 'skunkworks' at the Central IT Unit, which had been set up by Michael Heseltine, then deputy prime minister.

Feasibility study

"We were asked to look at how to change government through IT," remembers Muid. The collegiate atmosphere in the unit's Albert Embankment office was a refreshing change from the Home Office grind. "For the first time in my career, there was no 'business as usual' soaking up my time. We were put together to think outside the box and get our heads around what might be feasible."

Muid had a personal reason for wanting to improve government: vivid recent memories of his father's sudden death. "Helping my mother deal with it really struck home. I had to go to the town hall, notify the Inland Revenue; each time they took you through the same set of questions. It was a nonsense. Faced with a situation like this, people's lives are made so difficult because bureaucracy operates for the benefit of the institution, not the citizen." How much simpler, he thought, if all the relevant offices were connected electronically.

Several jurisdictions around the world were already putting e-government into practice. Singapore had branded itself the "digital island", while the Canadian province of New Brunswick was daringly issuing hunting licences on the web. The British government's main effort was a web portal open.gov.uk, launched the previous year as a directory of public service organisations. The pioneers were mainly in local government - notably Rutland, where the community website rutnet.co.uk served a county that had refused to die when Whitehall abolished it in 1974.

Government Direct looked at the big picture. It set out a premise that within 10 years, most citizens would interact with government electronically, with the help of smart cards, via public kiosks, digital TV and touchtone phones. The team recognised that joined-up bureaucracy would involve sharing citizens' personal information; it decided that this would be accepted if citizens believed the government was committed to "ethical processing".

Glimpse of the future

To give ministers and the media a glimpse of the future, the team assembled a collection of projects demonstrating electronic access to government. Exhibits included electronic kiosks from the London borough of Newham, an online service providing government forms and leaflets for business and Scotland's computerised land and property information system SCOTLIS. At the launch, it was announced that information about the Citizen's Charter written by John Major, left, would be made available on British Telecom's new Touchpoint kiosks. The green paper launched a three-month public consultation, attracting 300 responses, many from the IT industry. The main concerns were the threat to privacy from joined up IT systems; some critics saw the emphasis on smart cards as an identity card programme in disguise.

The Cabinet Office pressed on regardless. In March 1997 it announced its response to the consultation under the gung-ho headline: "Green light for government armchair revolution". But time was running out for any revolution with John Major in charge. Just two weeks later, the May 1 general election was held and Labour won its landslide.

Labour, which had described Government Direct as "too little, too late", came to power saying it wanted to modernise the government machine. In the run-up to the election, several ministers had visited the IT unit and voiced enthusiasm for its ideas. Muid remembers the transition as "pretty smooth ... the people we were speaking to had a huge appetite for using technology to change government services". The previous October, Tony Blair set the pattern of things to come by announcing his first e-government target: to have 25% of services "e-enabled" by 2008.

One enthusiast was a young adviser, Liam Byrne, formerly with Andersen Consulting. In a 1997 report, Information Age Government: Delivering the Blair Revolution, published by the Fabian Society, Byrne proposed 24-hour e-access to government services, which he estimated would save £3.5bn a year. However, it took two years for Byrne's ideas to become policy, in the 1999 paper Modernising Government. This set a 2008 deadline for "e-enabling" 100% of public services.

The following year, the prime minister brought the "e-enablement" target, by now almost synonymous with government on the web, forward to the end of 2005. This was in line with the European Commission's Lisbon agenda - however, unlike most other countries, the UK committed itself to "e-enabling" every single possible government transaction. The e-government programme, says Muid "became obsessed with targets". Responsibility for meeting them was given to a new Office of the e-Envoy, which absorbed both the IT unit and its technical counterpart, the Central Communications and Telecommunications Agency. At one stage, it employed 400 people.

Led largely by local government, the target was met. A decade after Government Direct, Britons can now order their car tax and report broken street lights on the web. This autumn for the first time, everyone in England has been able to register for school places on the web.

For all the talk of radical reform, however, government bureaucracy of 2006 is much the same as it was when the Spice Girls were in the charts. The latest rebranding of the e-revolution, under the name Transformational Government, is wrestling with the same questions raised by Government Direct - how to orient services around the user, how to authenticate citizens' identities electronically and how to share data in a legal and ethical way. We are no closer to creating a one-stop death notification service for the bereaved.

Back in 1996, Muid says, "We were saying 'let's clear up this mess'." And what about now? "Now? We've got a digital interface to that mess."

· Online bureaucracy

Government Direct set out seven principles for electronic public services. These were:

· Choice Electronic delivery to become the preferred option.

· Accessibility Services available whenever and wherever required, including by people in remote areas, with limited mobility or whose first language is not English.

· Confidence Information collected from citizens and businesses should be safeguarded.

· Integration Linking processes so that boundaries between government agencies are invisible to the user.